Browsing by Subject "Balance sheets"

Magud, Nicolas(University of Oregon, Dept of Economics, September 1, 2004)

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Magud, Nicolas
2004-10-15T13:54:18Z
2004-10-15T13:54:18Z
2004-09-01
http://hdl.handle.net/1794/232
41 p.
The paper analyzes the choice of an exchange rate regime for a small open economy indebted in foreign currency, incorporating the ¯nancial accelerator. Conventional wisdom suggests that floating regimes should insulate the economy from real shocks. I show that this result depends on the degrees of openness of the economy and foreign currency indebtedness and, in fact, does not hold for relatively closed economies. The transmission mechanism relies on nonlinearities in the impact of unanticipated real price changes on the external finance premium, in the spirit Fisher (1933).
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University of Oregon, Dept of Economics
University of Oregon Economics Department Working Papers;2004-14
Currency mismatch
Liability dollarization
Balance sheets
Exchange rate regimes
Openness
Nominal rigidities
Currency Mismatch, Openness and Exchange Rate Regime Choice
Working Paper